Dynamic Futon forecasts the following purchases from suppliers: Jan. Feb. Mar. Apr. May Jun. Value of goods ($ millions) 33 29 26 23 21 21 a. Fifty percent of goods are supplied cash-on-delivery. The remainder are paid with an average delay of one month. If Dynamic Futon starts the year with payables of $23 million, what is the forecasted level of payables for each month? (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.) b. Suppose that from the start of the year the company stretches payables by paying 50% after one month and 30% after two months. (The remainder continue to be paid cash on delivery.) Recalculate payables for each month assuming that there are no cash penalties for late payment. (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.)
Dynamic Futon forecasts the following purchases from suppliers: Jan. Feb. Mar. Apr. May Jun. Value of goods ($ millions) 33 29 26 23 21 21 a. Fifty percent of goods are supplied cash-on-delivery. The remainder are paid with an average delay of one month. If Dynamic Futon starts the year with payables of $23 million, what is the forecasted level of payables for each month? (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.) b. Suppose that from the start of the year the company stretches payables by paying 50% after one month and 30% after two months. (The remainder continue to be paid cash on delivery.) Recalculate payables for each month assuming that there are no cash penalties for late payment. (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter22: Providing And Obtaining Credit
Section: Chapter Questions
Problem 4MC
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Dynamic Futon
| Jan. | Feb. | Mar. | Apr. | May | Jun. | |
| Value of goods ($ millions) | 33 | 29 | 26 | 23 | 21 | 21 |
a. Fifty percent of goods are supplied cash-on-delivery. The remainder are paid with an average delay of one month. If Dynamic Futon starts the year with payables of $23 million, what is the forecasted level of payables for each month? (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.)
b. Suppose that from the start of the year the company stretches payables by paying 50% after one month and 30% after two months. (The remainder continue to be paid cash on delivery.) Recalculate payables for each month assuming that there are no cash penalties for late payment. (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.)
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